Student Debt to 1st-Year Earnings: THECB's 60x30TX Goals

This blog post is the second in our series exploring student loan debt. Our previous blog post showed promising trends in terms of the percentage of bachelor’s graduates at Texas public universities who graduate with student loan debt decreasing from 62.5% in 2014 to 56.4% in 2020, as well the statewide median debt amount dropping from $26,564 per graduate in 2014 to $25,207 in 2020. We now turn our attention to the Texas Higher Education Coordinating Board’s (THECB) “Student Debt” goal as stated in the 60x30TX Plan: Undergraduate student loan debt will not exceed 60% of first-year wages for graduates of Texas public institutions.

Comparing Debt and Earnings at Public Universities

Based on the THECB’s stated goals, the 60% benchmark was established to “ensure student loan debt levels stay in balance with the earning potential of credentials.” While the THECB reports data combined for 2- and 4-year institutions, our review of the data will concentrate on public universities in the state.

In the first visualization below (Debt-to-Income: Statewide), the data are trending in the desired direction across all public four-year institutions. In 2014, the Debt-to-Income ratio was just above 65%, while that number fell to 58.2% in 2018. This decrease is a 6.8 percentage point drop from 2014 to 2020, as year-over-year comparisons in the line chart show a decrease in each of the five years in the data (as indicated by the circles shown in green).
Clicking on “Debt-to-Income: Systems” shows the annual data broken-out by public university system in the state. Using the statewide average of 58.2% for 2018, there are three public university systems with a collective median percentage below the state average: the University of Texas System at 51.6%, the University of Houston System at 53.7%, and the Texas A&M University System at 57.9%. The Texas Tech University System has the highest percentage for public university systems with more than one institution at 68.1%. The Texas State University System had the largest percentage point change for public university systems with more than one institution of a decrease of 8.9 percentage points, with A&M System following closely at an 8.6 percentage point drop.
The “Debt-to-Income Change: 2014 vs 2018” tab at the far-right shows university-level trends for the public universities in Texas. The data are organized by Peer Group as defined by the THECB. It is recommended to click on the “Full Screen” icon at the bottom-right of the visualization to see all of the data in one view. The state average change of -6.84 percentage points is shown in the blue reference line.

There are a total of 14 public universities that had a percentage point change better than the state average. These ranged from Lamar University’s decrease of 24.6 percentage points (75.01% in 2014 to 50.37% in 2018) to West Texas A&M University’s decrease of 6.85 percentage points (67.75% in 2014 to 60.9% in 2018).
More than half of the A&M System institutions (6 out of 11) exceeded the state average change in percentage point change, as 7 A&M System schools were in the top 15 of public universities in Texas.
Three public universities had an increase from 2014 to 2018 in the student debt to first-year earnings percentage calculation, with the University of Houston-Victoria having the largest increase of 7.1 percentage points (53.9% in 2014 to 61.1% in 2018).

NOTE: A fourth tab that includes debt-to-income data by university has been added to the visualizations for those interested in exploring the campus-level data further. A series of filters has been added to the right side of the visualization. For easier viewing, we recommend clicking the “Full Screen” button on the bottom right.

So What?

This is the third statewide metric in the THECB data related to student debt that appears to be trending in the right direction:

Percentage of bachelor’s graduates leaving school with student debt is decreasing;
Median debt of bachelor’s graduates statewide is decreasing;
Percentage of median student loan debt to first-year earnings for bachelor’s graduates is decreasing.

While the general trends are promising, a closer look at the individual institutions shows that much work remains with regards to student loan debt. Of the 35 public universities in Texas, 18 of them have a percentage of median student loan debt that is more than 60% of first-year earnings for bachelor’s graduates. Of these 18 institutions, 7 of the universities are right at or above 70%: Sam Houston State University (69.7%), Texas Tech University (69.8%), Texas A&M University-Kingsville (70.1%), Stephen F. Austin State University (76.3%), Sul Ross State University (77.3%), Prairie View A&M University (101.3%), and Texas Southern University (103.2%), as the two schools at the bottom of this list are the two HBCUs in Texas. Having percentages at or above 100% means that successful students are leaving school with a bachelor’s degree and are earning less in their first-year jobs than the total student loan debt that they accumulated as undergraduate students. While the average debt for bachelor’s graduates has fallen significantly at PVAMU (down $6,173 from $37,859 in 2014 to $31,686 in 2020) and Texas Southern (down $4,758 from $37,512 in 2014 to $32,754 in 2020), the 2020 debt loads for graduates from these institutions rate as two of the top-three public universities (along with Texas Tech University) for median student loan debt for bachelor’s graduates at public universities in Texas. These data speak to broader concerns related to equity that we hope to revisit in future blog posts.